Copart (NASDAQ:CPRT) Q4 EPS Misses as Costs Rise, Announces $1.9B ACV Auctions Buyout

Copart (NASDAQ: CPRT) reported Q4 fiscal 2026 results for the quarter ended July 31, 2026, with GAAP EPS of $0.35 falling 14.6% from $0.41 a year earlier and missing the $0.39 analyst consensus by 10.26%. Revenue grew 2.4% year over year to $1.15 billion, a marginal beat of 0.52% versus estimates. Separately, the company announced an all-cash agreement to acquire ACV Auctions for approximately $1.9 billion, at $10.50 per ACV share, representing a premium of 45% to ACV's prior closing price.

Q4 Fiscal 2026 Results

• Revenue: $1.15 billion, up 2.4% year over year from $1.13 billion, with service revenues rising 1.4% to $969.5 million and vehicle sales climbing 8.3% to $182.9 million.
• Gross profit: $481.4 million, down 5.5% from $509.7 million in the prior-year quarter, as cost growth outpaced revenue gains.
• Operating income: $368.9 million, down 10.6% from $412.6 million, with operating margin contracting 4.7 percentage points to 32.0% from 36.7%.
• Net income attributable to Copart: $327.4 million, a decline of 17.4% from $396.4 million in Q4 fiscal 2025.
• Capital expenditures: $337.4 million for the full fiscal year, down 40.7% from $569.0 million the prior year, contributing to free cash flow of $1.27 billion on operating cash flow of $1.60 billion.

What Drove the Results

GAAP EPS of $0.35 missed the $0.39 consensus by 10.26%, while revenue of $1.15 billion edged past estimates by 0.52%. The divergence between a modest revenue gain and a sharp operating income decline of 10.6% was driven by accelerating cost growth across multiple lines: general and administrative expenses rose 16.6% to $97.8 million, facility operations costs increased 7.7% to $450.7 million, cost of vehicle sales grew 11.4% to $164.2 million, and facility depreciation and amortization expanded 14.0% to $53.8 million. Non-operating income also deteriorated, with other income swinging from a gain of $16.0 million to a loss of $3.8 million, and net interest income declining 20.5% to $39.6 million from $49.8 million.

For the full fiscal year ended July 31, 2026, revenue was $4.7 billion, up 0.4%, while net income attributable to Copart declined 4.4% to $1.48 billion, and diluted EPS fell 2.5% to $1.55 from $1.59.

ACV Auctions Acquisition

Copart announced a definitive agreement to acquire ACV Auctions for $10.50 per share in cash, valuing the deal at approximately $1.9 billion and implying a 45% premium to ACV's closing price prior to the announcement. ACV Auctions operates an online wholesale vehicle marketplace. The $1.9 billion transaction represents approximately 6.4% of Copart's market capitalization of $29.6 billion. Copart held cash, cash equivalents, and restricted cash of $1.91 billion as of July 31, 2026, alongside $2.58 billion in held-to-maturity securities, providing substantial liquidity to fund the all-cash deal.

Wall Street View

Analyst sentiment on Copart heading into the report leaned constructive, with the most recent consensus as of September 1, 2026, showing 5 Strong Buy, 8 Buy, and 7 Hold ratings, alongside 1 Sell. No updated price targets were available following today's results.

Investor Takeaway

The Q4 result illustrates a company where revenue growth is currently being absorbed by faster-rising operating costs, a dynamic that compressed operating margin by 4.7 percentage points to 32.0% in the quarter. The ACV Auctions acquisition at $1.9 billion broadens Copart's reach into wholesale vehicle markets, but integrating a platform of that scale while managing cost discipline will be a central question for investors to track in coming quarters. The 40.7% year-over-year reduction in capital expenditures to $337.4 million helped sustain free cash flow of $1.27 billion for the fiscal year, providing a financial buffer as the company deploys capital toward the acquisition.